Good morning, ladies and gentlemen, and welcome to today's telephone conference of Allianz SE on the occasion of the publication of the financial results for the second quarter 2020. For your information, this conference will be recorded, and with this, I would like to hand over to Holger Klotz.
Good morning, also from my side, and welcome to today's phone conference on the results of the second quarter 2020 of the Allianz Group. As usual, our CFO, Giulio Terzariol, will guide you through the quarterly results and answer your questions afterwards. And with this, Giulio, the floor is yours.
Thank you very much, Holger. Good morning, ladies and gentlemen. I'm glad to be able to present to you the results of Allianz, and I hope that you and your families are all in good health. Before we enter into the figures for the second quarter, on page three, we will show the results for the first six months of the year. Overall, we've generated a resilient performance.
The second quarter was better than the first one when it comes to revenues. If we start with Property and Casualty, you can see that the premiums are more or less what they did the previous year, the previous period, which is a good result. In Life/Health , there was a slight decline of premiums, and that was also due to the lockdown measures. In Asset Management, our revenues grew even by 3%. Overall, we've had a significant performance compared to the environment, which is quite positive. The operating profit was at EUR 4.9 billion, adjusted for COVID effects of EUR 1.2 billion.
Our operating profit was at EUR 6.1 billion, which is at the previous year's level. Once again, a robust and resilient underlying performance. The shareholders' net income follows the development of operating profit, and the combined ratio was at close to 97%. If we adjust the combined ratio for COVID-19 effects and other negative and positive one-off effects, our combined ratio was slightly below 94% for the six months, and definitely below 94% for the quarter. Overall, a good development. Our new business margin was at 2.9%, which is a very good figure, as such, if you take into account that interest rates have dropped strongly compared to the previous year's level. In Asset Management , for the six months, we had net outflows.
But if you take into account that in the first quarter, net outflows amounted to EUR 57 billion, that means that in the second quarter, we had EUR 26 billion net inflows. So all in all, I would say this is a sign of a good performance again. So all in all, the environment is, of course, different than what we're used to. But nevertheless, our figures are good. If you take into account the COVID effects, and if you adjust for the COVID effects, you can see that the figures, as such, are really good and in a normal are on par with what we would have expected in a normal situation. On page five, we can see the figures for the second quarter. Revenues in the second quarter went down 8%, adjusted for consolidation and foreign exchange effects. And that's no surprise.
We had expected that due to the lockdown measures, the premiums would go down and would decrease. Of course, that was the case above all in Life/Health , where we had a decline of premiums of around 13%. Other than that, the operating profit decreased by EUR 600 million. But as you can see, the COVID-19 impact was EUR 500 million. Main driver here, the development in P&C, which means if we take the EUR 2.6 billion operating profit and add the EUR 500 million, then we would have come up at EUR 3.1 billion, which shows good performance once again.
The net income, as I've said before, basically follows the development of operating profit. At EUR 2.6 billion operating profit in the second quarter, we were better. We had a better result than in the first quarter. In the first quarter, we had an operating profit of EUR 2.3 billion. You can see a certain stabilization that has entered into the capital markets. And that then, as soon as that happens, our operating profit also increases. And then you also have to adjust for the COVID-19 impact to get a feeling for the underlying performance.
On slide seven, we show the figures for our capitalization. Our solvency ratio went down slightly and is at a good level of 187% now. Our key sensitivities are shown on the right-hand side. They've remained more or less unchanged, the sensitivities we showed in the first quarter. And I would like to tell you that on page eight, we've added a comment. For transitionals for Allianz Life Insurance and the private health insurance in Germany, we've taken provisions based on the discussions in Europe that you couldn't do transitionals in the future any longer.
For caution reasons, we decided that the transitionals for Allianz Lebensversicherung and Allianz Private Krankenversicherung would be shown here, and which, of course, also has an effect on the solvency ratio of the group, including transitionals. We would have been at 17%, but as always, we focus on the solvency ratio without transitionals and will therefore continue reporting as we've done in the past and show the solvency ratio without transitionals as a main element of management also. Page nine shows the development and drivers for the development of the solvency ratio. And there are basically two factors to explain the development in the second quarter. On the one hand side, we once again had good organic capital generation. That's good. That's the underlying performance which we also want to see in the future.
This good organic capital generation was then countered or compensated for by the market effects. What happened in the second quarter? On the one hand side, equity markets went up, which is certainly positive for the solvency ratio. The interest rates decreased slightly, which basically offset the positive development from the equity markets. The corporate spreads became tighter above all, and that led to a negative effect. This is also the reason for the slight decline of our solvency ratio compared to the level in March, but at 187%, we're still on a very comfortable level with our solvency ratio. Let me now come to the Individual segments on starting on page 11 with Property and Casualty and the development of premiums or revenues. Growth rate showed a slight decline with -1.6%. As I've mentioned, this is a consequence of the lockdown measures.
I would now like to focus on two or three figures that stand out. First of all, the U.K. with - 10%. Here we see the COVID-19 effects, but also a stretching in commercial areas. So that's a good sign for the profitability in search for the profitability in our unit in the U.K. because we've corrected something here. Then a growth rate of 25% at AGCS, that stands out. You need to take into account that we had the fronting business effect from ET . If we adjusted for this effect, the growth rate would have been at closer to 5%, so close to what we saw in the first quarter. What's good is that this growth rate was driven by price changes. That is to say, prices have increased, and that should also be possible for the future performance of AGCS.
And then Allianz Partners, on the other hand, with -27%. Allianz Partners, of course, suffers due to the travel restrictions. But what's maybe more important in this slide is the development in price changes on renewals. As you can see, we have a +5.4% here. In the first quarter, it was at 3.9%. So in that sense, we've seen a speeding up of this development, if you wish, and that was mainly driven by AGCS, which should be rather positive for AGCS future profitability. With this, I would like to come to page 13 to show you the development of our operating profit and Property and Casualty. All in all, the operating profit declined by close to around EUR 215 million. Main drivers behind this, the underwriting result with -EUR 150 million, and then also -EUR 100 million stem from our investment result.
Now, if we focus on the underwriting result first and on the combined ratio, here you can see that the combined ratio was at 95.5% with EUR 400 million impact from COVID-19, which in percentage points means 3.1 percentage points. So if we adjust the 95.5 for these 3.1%, we are at 92.4%. But we also have to say that natural catastrophes in the second quarter were low, with only 0.9%, where we would usually expect the value of around 2.1%. That's the average of the last five or even ten years.
So we were lucky in this regard. So you would have to adjust for this upwards on the other hand. The cost ratio was at 25.7%. We had a positive one-off effect here. If we adjust the cost ratio or the expense ratio for that, we would have been at around 27%, which is still a very good figure.
Now, if we look at the runoff ratio, 0.8%, significantly lower than the previous year and also lower than we would usually expect, and this is due to the fact that we remain very conservative due to the potential uncertainties we'll be facing, and therefore, we've taken a more conservative approach here, so if you look at the combined ratio of 95.5% and adjust for the COVID effects, adjust for the low burdens from NatCats and one-off effects in the cost ratio, and you also normalize the combined ratio for the runoff ratio, then all in all, the combined ratio would be clearly below 94%, and that's the underlying performance, which is decisive for steering also in the future in the assessment, so the underlying performance, in spite of the burden from COVID, was quite healthy.
With this, I would like to come to page 15. Here you can see the figures for selected units. Of course, there were distortions due to COVID-19, and I would like to focus on those that stand out. First, the U.K., where we had an operating profit of 201 million EUR, 100 million EUR of this stemming from a one-off effect regarding the patient plan , and then AGCS, with a combined ratio of 117%. There was a burden of 18% from COVID-19, so if we adjust the AGCS figures for COVID-19 impact, we would have come up with a combined ratio of 99%, which would have been in the framework of our expectations.
Then Euler Hermes, with the combined ratio of 101% for the quarter, which, of course, is no surprise. This is what we had expected, and we also expect or anticipate a combined ratio on this level for the remainder of the year. This is basically what we had already taken into account after the start of the COVID-19 pandemic. All in all, a combined ratio that was slightly above our expectations, but adjusted for these special effects.
If we look at the underlying performance, quite satisfactory. Now, on page 17, we show the investment result in P&C. All in all, the investment result declined by around EUR 100 million, mainly due to two effects. First of all, the interest rates were lower. And in some emerging markets, such as Turkey, they were extremely low. And of course, that has an effect. And also the foreign exchange currency volatility can have an effect here. And what's new is we also had significantly less dividends in the second quarter compared to what we usually received, which, of course, was another consequence of COVID-19.
We didn't have the effect in our EUR 400 million burden that we're taking into account. When talking about COVID-19 and Property and Casualty, we've only focused on the burden on the underwriting result. If you take a closer look, there's also a burden in other items and positions. We didn't want to be that nitty-gritty in our calculations. That is still something you have to take into account. With this, I would like to switch to our segment, Life/Health . Starting on page 19, if we first look at the production, you can see that we had a growth rate of -24%. No surprise if you look at the lockdown measures. That, of course, leads to the fact that production, especially in life insurance, went down.
But what we've also seen in June, the figures started to pick up again compared to April and May. So as soon as the restrictions were loosened to a certain degree, you could see that production started to pick up again. The new business margin was excellent with 3.1%. Of course, it's lower than in the previous year. But we have to take into account that the interest rates are also significantly lower. So the burden in the calculation of new business margin due to lower interest rates amounted to around 140 basis points. But thanks to our measures, and especially through the management of our asset mix, we caught up 90 basis points. So we had a decrease of only 50 basis points. And at 3.1%, the new business margin was on our target level.
So all in all, profitability of new business was quite okay against the backdrop of the environment. But also even without that, because 3.1 is good. Now, page 21 here, we're talking again about profitability of new business, but we're talking about the IFRS profitability for the whole portfolio. Operating profit remains robust with EUR 1 billion, a good figure. Of course, lower than in the previous year's period, but you have to take into account that in 2019, we had some special effects above all, EUR 150 million due to closure costs in the U.S. And in 2019, also we had the profits of Banco Popular.
So if you adjust that and get on a like-for-like basis, the operating profit more or less remained on the previous year's level, a little below our expectations, which would have been EUR 1.1 billion. But the volatility was extremely high in the second quarter. I'd say EUR 1 billion operating profit against this backdrop is really a good result. Coming to page 23, where we show the figures for the selected units. Once again, looking at the new business margin, that is really positive. It's really positive that all OEs have a new business margin of above 2%, which is also a clear sign of quality across the board.
And the fact that each and every OE has tried to counter the trend in interest rate development. In operating profit, there are some things that stand out, the U.S., first of all. But as I said, in the previous year, there was this one-off effect. And if you adjusted for this effect, the comparison to the previous year wouldn't have looked as dramatic as it does here. In Spain, as just mentioned, there were the last year we had the profits of Banco Popular. So that's what we're taking out.
So if you take out the U.S. for a second, you can see that overall, the results were quite stable, both when it comes to operating profit and also good results when it comes to our new business margin. Page 25 shows our investment result in Life/Health , our investment margin. This margin remains stable, which holds true both for the margin percentage-wise, but also for the margin if we look at the absolute figures. So all in all, stability in this KPI for the second quarter. With this, I would like to come to the figures of our Asset Management segment on page 27. Overall, the capital base assets under management increased by 5%. And we had a good development both at PIMCO and AGI.
But it's best if we move directly to page 29, where you can see the development for the third-party assets under management. All in all, we had an increase of EUR 100 billion here. And you can clearly see that we had a positive development due to the market developments. Interest rates went down in the second quarter. Equity markets showed a good performance. And that, of course, increased our asset base. Foreign exchange effects went against us because the U.S. dollar devalued. But what's good is the development of net inflows. We had EUR 26 billion positive inflows here.
And we were positive both at AGI and PIMCO. And if you look at the development per asset class and per region, you can see basically that almost all regions and almost all asset classes contributed to this growth. We had increases in almost all classes and regions, which once again is a sign of quality. Page 31 shows the revenues for Asset Management . They went down 3%, adjusted for foreign exchange effects, and that was due, first of all, to the lower performance fees, but also to the fact that the margin, the fee margin, was 2 basis points lower than in the previous year, and that shows there's a certain volatility per quarter in this case.
If you look at the six-month figures, revenues went up by 3%, and the fee margin remained more or less flat compared to what we had in the first six months of 2019, so all in all, I would say if we look at the six-month view, we see a more positive development compared to this quarterly comparison. The six-month view is more in line with how we should see the figures from our point of view. Now, page 33, operating profit at 640 million in Asset Management. That's good.
38 million lower than in the previous year. But here we have the effects of the lower performance fees reflected and also a higher expense ratio than in the previous year. And here we have to differentiate between PIMCO and AGI. In PIMCO's case, the expense ratio was up 1% compared to the second quarter of 2019, but basically on the level for the overall year 2019. And that is also the expense ratio, which we would expect at PIMCO. So it's just a case of volatility. And with AGI, we also had some quarterly volatility, but at 72.3%, the expense ratio for AGI is higher than the level that we would wish for.
And therefore, we've started to take measures within AGI to counter this. Now, if we take the six-month view, once again in Asset Management , we had an operating profit, which was 5% above the previous year. So all in all, we are highly satisfied with the results, which we've posted in the first half of the year in Asset Management. That's enough to come to page 35, our corporate segment. All in all, we had EUR 17 million less result in corporate. And the main reason for that was the lower dividends. So we've received lower dividends from our capital investments in the corporate segment. Also, interest rates went down a bit. So that basically explains the decline here, the decline in operating profits. I mean, dividends will start to pick up again one day. So this is more a temporary effect.
But as long as we are still in the COVID crisis, we have to assume that we will get lower dividends. Page 37, as always, shows the transition or the development of non-operating costs. And I would say there's nothing that stands out. Maybe the only thing might be the effective tax rate at 28% compared to 23% in the previous year. And there's always a certain volatility within certain quarters. There are tax returns all the time. Sometimes they are positive. Sometimes they're negative. And if we look at the six-month view, once again, the tax rate for 2020 is at a little below 25%. And in the previous year for the six months, the effective tax rate was a little below 24%. So only 1% up, basically. And that is just a normal difference that you can have between two periods.
Nothing special has happened in the non-operating items, which takes me to page 39. I mean, the environment is clearly different from what we expected before the start of the year. I would say the performance was really robust. It's not going to be a record year. I think we've all learned this, even though we've continued to deliver good results. We need to focus on the things under our control. We can see in the underlying performance in Property and Casualty with a combined ratio of below 94% for the second quarter. If we adjust the cost ratio for special effects, we have a cost ratio of around 27%. A few years ago, the figures were closer to 29% three years ago.
And then you've also seen how well we performed in life insurance with the new business margin, even though interest rates are more or less negative across Europe. And also in Asset Management, we increased our profits for the first six months by 5% against an environment that wasn't that easy. So all in all, we posted, as I said, a robust performance. And we would like to thank all of our employees for their excellent performance. And with this, I would like to give you the opportunity to ask your questions.
Thank you very much, ladies and gentlemen. If you want to ask a question, please press the asterisk button and the number one on your phone. Make sure that your voice button is deactivated so that the signals can reach our equipment. We're now taking the first question, Michael Flämig from Börsen-Zeitung, please.
Yes, good day to you, Michael Flämig , Börsen-Zeitung. I've got three questions about the outlook, the measures, and the restructuring. As far as the outlook is concerned, there is no new prognosis. But you did say that in life production increased in July again. Can you give us a perspective for the remainder of the year now in early August? What kind of development do you expect and what kind of burdens you still foresee? Second question about the measures that you take. EIOPA was mentioned by you.
What are the reasons in the subsidiaries themselves to use that? Was that an obligation, or are there economic motives for that? Third question, restructuring AGI. You already mentioned that there is something there again, and also the loss in jobs there. What kind of restructuring costs will Allianz face in the second half of the year? And in which departments and which areas do you expect to become active due to COVID-19? Thank you.
Well, maybe we will start with restructuring in AGI. I'm not going to give you any figures right now, but we will obviously clearly have a look at the expenses quota in AGI. We will work on that. And as you will probably remember, our goal was or is a cost-income ratio of 67% until 2021. It might be the case now that this takes a little bit longer until we reach the 67%.
But that might mean that we take a year longer. But it's still the goal, basically, that we have for AGI as far as the expenses quota or the expenses ratio is concerned. So you see restructuring costs in the second half of the year will have to be expected. And maybe that also goes into 2021. But at the moment, I don't really want to give you a figure for that. But we will take measures. We will take measures at AGI so that we can achieve our goals. Today, as you have seen, we are at 73%. So from 73%-67% in a couple of years, that means you have to manage your expenses actively. As far as the measures, the preliminary measures are concerned, this was purely a precaution, as I said. And this is something that we have already decided at the end of 2019.
The topic, there is this long-term guarantee review of EIOPA, and there are also EIOPA, and there are certain considerations. One of these considerations is that we cannot apply more for transitional in future. For us, transitional has always been a potential measure that we always said we can apply for that in an emergency situation. I mean, we might not be in an emergency situation right now, but we never want to be in a situation where we don't have this option anymore. So this is purely a precaution in case of a change happening so that in future we can apply for more transitional in future. That was the only consideration. As I said, this is something that we already looked into at the end of 2019. Then the third question was the premiums in life.
Generally, the prognosis for the group against the COVID-19 background.
Okay, perfect. So for life assurance, briefly, what we saw in June, it's really differing from unit to unit. But in some cases, we've got growth rates of 10%. In some cases, even doublings. The only thing that applies to life, it's difficult to make any statements right now. We're going into summertime right now. Summertime is always slower. The Italians don't buy any policies in August. That is something that we all know. So it'll take a little bit of time until we get a picture where the production stands. I would also say production of life in one year is not really deciding the war. And so in that sense, even if production was slightly lower, that wouldn't be a problem. For the group altogether, I would say the following.
We've got EUR 4.9 billion operating profit for the first half of the year, and let's assume the situation remains stable. Stable meaning more or less as today. I would expect that the second half of the year is better than the first half of the year, so that would be our expectation because let's assume there is no second wave of COVID. I would expect less burden, obviously, for the second quarter, and if the markets remain stable, let's take life assurance, for instance. In the first quarter, we had EUR 800 million profit. In the second quarter, the markets were more stable. We reached EUR 1 billion already, so if we assume that the second half of the year remains somehow stable, we can expect more operating profit than EUR 4.9 billion.
The topic is, there is a little bit of an if because we really don't know if there's going to be a second wave or not. And this is difficult, really, to evaluate right now what's going to come. And that is the only reason why we decided not to give any outlook at this point. Not because we know about special things, but it's just that we say the uncertainty as to what's going to happen for the next six months is still too high. But I can only repeat myself. In case of the situation remaining stable, we should see a better result for the second half of 2020 than what we've seen so far.
Thank you very much, Mr. Terzariol.
Thank you too. The next question.
We take a question from Herbert Frommer, Süddeutsche Zeitung.
Good morning. I've got three questions. For one thing, other insurers reported high losses of above EUR one billion, for instance. Where is the distinction between you and them? Why do you come off so much better, apparently? And what might still hit you? What about closures, company closures, or business interruptions? And then insolvency waves with losses in credit. Would that hit you? I would like to know how COVID-proof Allianz is at the moment. You didn't say too much about dividends. What about share buybacks? Is that something that's definitely not going to happen this year? And the third question, there was this Wirecard issue, this Wirecard scandal. To what extent does that hit you? You had a credit card together with them. Economically, apparently not such a big problem. But what about contents? And then I would also like you to confirm that Allianz is not involved in Cum-Ex in any way.
Okay. Thank you very much for your questions here. Maybe we'll start with the first question was, why do we have less loss than others? I would say there are various different reasons. I've seen a couple of competitors who posted higher losses than we did. But I've also seen competitors who had lower losses. I would say that has a lot to do with the business profile. Which countries do you cover? What kind of business lines do you cover? So that makes the main difference from my point of view. I would say for one thing, you have to compare country for country, and then you get a more realistic picture. But the numbers are highly different. So I wouldn't say, well, we are slightly better than others, maybe. But altogether, I've also seen competitors with lower burdens, and I've seen competitors with higher burdens.
What might happen in future with business interruptions? I would always differentiate between whether we have a second wave or not. Let's assume there is no second wave. Then I'd say we will certainly have reflected in our figures what we expect. There is always going to be a certain insecurity in the sense that, as you probably know, in the U.K., there is a procedure now, the so-called High Court. And they will certainly take a look at so-called test cases. And based on these test cases, it could be that the numbers go up or down. The same is happening in Australia at the moment. So there is a certain uncertainty in terms of the burdens that we might face and also in terms of what we've already seen. But I wouldn't expect massive distortions.
But the topic is rather what might still happen? Are we going to have a second wave or not? Then credit insurance, that is also something that we will be busy with in the second half of the year. And the topic for credit insurance might also be potentially a topic for 2021. That's also something that remains to be seen. And as far as insolvency waves are concerned, apart from Euler Hermes, where I think with the state, with the government programs, we have a good solution. We found a good solution also for the economy. So if we take a look at the insolvency wave, apart from Euler Hermes, of course, it can always be the case that there will be depreciations in the portfolio. But we should be certain that we have a portfolio with quality. That's what we have.
And also that we have a certain amount of diversification. And as you've already said, at the end of the day, if there is a big insolvency wave, Allianz will be hit by that. There is no doubt about that. But potentially, we will be less affected than others. And that is important for us. And I would assume that the diversification in our portfolio will be very, very helpful in that. As far as the topic of share buybacks is concerned, after the summer break, we will make a new decision. At the moment, share buyback is still not covered by our solvency quota. So that's not reflected. And after the summer break, we will make a new decision as far as that is concerned.
If I see where the sentiment is on the regulatory side, then I'd say there is certainly a strong recommendation of the regulatory on the regulatory side that potentially against buybacks, and that is something that we will have to consider, so I would say a buyback is rather unlikely. The likelihood that we don't have a buyback is higher than having a buyback, but that's, as I said, a decision that we will make after the summer break. As far as Wirecard is concerned, we do have a burden there, but it's something that is not too high. It's something that is manageable. In that sense, this is something that we're not particularly worried about, and as far as your fourth question is concerned, I have to admit I don't know the answer, so I guess we will have to hand the information to you later on.
Thank you very much.
Thank you too.
Let's come to the next question. That is Alexander Hübner from Reuters.
Yes. Good morning, Herr Terzariol. I've got two questions left, actually. The one topic, Atlantia, Autostrade . The Atlantia yesterday posted a depreciation of EUR 700 million for its investment in Autostrade. After the procedures in mid-July with state taking over, what is the position of Allianz? Did you also do any depreciations? And could you also imagine that to become one of the investors that will invest even stronger in Autostrade? And the second question about the subpoena of the SEC because of these Structured Alpha funds. Do you have any provisions for that? Have you already formed any provisions for that? Or do you see that the court cases are so far-fetched that you don't need any provisions?
First of all, Autostrade per l'Italia . In the second quarter, we did a depreciation between EUR 30 and 40 million. The burden resulting from that, in our yearly revenue, is rather low, really, because there are other effects, tax effects, and altogether, depreciations on ASPI will have a negligible effect on the group as far as our results are concerned. As far as this topic is concerned of increasing our investment in that, I would say off the cuff, not necessarily, but on the other hand, you never know. You'll just have to see how the situation is going to develop, but as of now, we're not actively considering increasing our investment, but as I said, the situation can always change.
As far as AGI is concerned, we haven't booked any provisions because you would book a provision if you thought that you might be more likely to encounter a problem. But we are very confident at this point as far as our position is concerned. We're going to defend ourselves. So in that sense, we don't see the necessity of booking a provision because we assume that the likelihood that we have to pay out is less than 5%, clearly less than 5%.
5 or 50.
So it's definitely low. So the likelihood is very low. And as far as ASPI is concerned, that's EUR 30 million-40 million, the depreciation.
Yeah. But as I said, again, the burden on the yearly revenues, we're talking about a couple of million euros. So that is really more than manageable from our perspective. That's not really relevant.
Okay. Thank you.
You're welcome. Next question, please.
Ladies and gentlemen, just to remind you, please press star one to ask a question. We will now take the next question, Karin Finkenzeller of Wirtschaftswoche.
Good morning and thank you for taking my question. I would like to come back to the issue of business closure insurance. I would like to know how much or what amount you've already paid out in the framework of the Bavarian Model. And then I would like to know what provisions you've taken for the court cases in this regard. And linked to that, the third question. On Friday in the District Court of Munich I, there was quite some criticism regarding the wording in the policies. So how could it be that you referred to the infection protection law in the policies but that the diseases and germs covered haven't been fully included in the law, haven't been covered? So did you miss something or was this wording on purpose? Maybe you could explain this to me.
Okay. Let's start with your last question. There are policies with exemption clauses and others without. And you always have to deal with the specific coverage in those cases. Then that's the main factor, whether there is an exemption clause or not, an opening clause or not. And of course, there was no intent to be intransparent. And I don't think there is any intransparency at all. You just have to look at what's covered. And then, of course, that decides whether you have coverage or not. So it's a purely factual story and not the topic of intransparency from my point of view.
What do you mean by court cases or?
Well, what I meant, I mean that there are several disputes in court that have already started, which could, and the number could also increase. And you don't know whether you will then win the cases or lose them. So I would assume that you've created provisions for that.
Could you specify them value-wise?
Okay. So in general, that's correct. We always talk about 70% of our figures are taking the reserves are taken into account for things that could happen. And in this sense, all in all, for business interruption for the group as a whole between the first and the second quarter, we assume a burden of COVID of EUR 600 million. Part of this stemming from Germany, but also from the U.K., Australia, and other countries. But all in all, for the group, EUR 600 million. And Germany has a part of that. But I don't know the state exact figure for Germany, but you can assume that's more than EUR 100 million. That is what I can tell you.
But that's the overall burden, right?
Yeah.
That's the No, I meant whether you can specify what amount of provisions you formed specifically for the business closure insurance for these court cases.
Well, out of the EUR 600 million that we formed for the group, a part can be traced to Germany, and in the case of Germany, we're above EUR 100 million, and this is what I can tell you, but you can then calculate it's a low three-digit million amount for Germany.
Thank you, and the first question that referred to how much you've paid out in the framework of the Goodwill model,
well, 75% of our customers have used this Bavarian model.
And how much was that in total?
I don't exactly know what the sum was, to be honest, too. But that would be part of the EUR 100 million plus that we've created in reserves for Germany.
Okay. Thank you. Next question, please.
We'll now take a question of Christian Schnell of Handelsblatt.
Good morning, Mr. Terzariol. Two questions. So you've just mentioned the topic of dividend. So in May, you paid out EUR 9.60 per share, which at the time led to a certain concern by the authorities, the regulatory authorities. But from your side, Mr. Bäte has already announced that also for this year, you would like to stick at least at EUR 9.60 or even go up. So don't you see a potential conflict coming towards Allianz out of this? And the second question then, quarterly reports. Some time ago, you stated that you want to get away or go away from quarterly reports. Is there anything? Do you have an update on this?
Okay. Thank you. Regarding the quarterly reports, we've seen that we go if we went into this direction, the enthusiasm wouldn't be that high. Of course, we listen. The tendency that we want to give up quarterly reports has been reduced, I would say. We haven't taken a final decision. As always, we listen to what we hear. If you ask me, my personal opinion, I think you can create good transparency also without quarterly reports because you will report on special topics anyway.
Clearly, if we see that the wish of important stakeholders is that we continue to do quarterly results, then of course, we will closely listen to these voices. I would say we will probably change our point of view on this and continue to do quarterly reports. With IFRS 17, maybe we will come back to this topic. Anyway, I can't send the message right now that we probably or that we tend to continue with quarterly reports.
Now, when it comes to the dividend with the EUR 9.60, yes, we expect that next year we can continue to pay out the EUR 9.60. When it comes to the regulatory authorities, well, I have to say that compared to other regulators, BaFin is more pragmatic. They look at it in a positive sense. They look at the figures and the stress tests when it comes to solvency ratio and the liquidity positions, and that is right, but they didn't hand out any all-out ban on dividends, so I think BaFin is in the right position on that. What we've seen is that in the Netherlands, for example, the regulator also goes into the same direction, and in this sense, I think we need to prove that we have the strength in our balance sheet and in our liquidity positions.
And if we can prove that, then we will certainly also be able to pay the dividend. It might be different when it comes to a share buyback. So you have to separate here, distinguish between share buyback and the dividend. So when it comes to buyback, there's a bit less acceptance on the regulatory side to do share buybacks. But that's important. I think, I mean, I can understand where the regulators come from. Of course, in a situation like the one we're in right now, it is important that you manage your capital cautiously. But on the other side, you also have to understand that the dividends go into people who need some cash as well.
I can tell you, when we took the decision to pay our dividends, we received lots of emails from our small investors, from our small shareholders who thanked us for paying the dividend because it made a difference to them. All of this needs to be taken into account. I can clearly understand the position of the regulators. Paying a dividend is good for the people, is good for the economy. I mean, if there's no cash movement any longer because everyone keeps cash back, then that wouldn't be helpful either. You need to find the right balance. As we're always good corporate citizens, we'll try to find the right balance. Dividend payment has a high priority for Allianz.
Was your question answered?
Yes. Thank you. The next question, please.
Ladies and gentlemen, we will now come to questions from the English Language Conference.
Thank you. We'll take a question now from Sam Casey from Insurance Insider. Please go ahead.
Morning. You reported very strong pricing growth in the P&C division, around 20%. Would you say it looks like we're entering into a hard market for P&C insurance, and will you be looking to grow into this at all?
So the question was the hardening, if we see the hardening continue. Yeah. By the way, I love your publication. So I love all publications. But I really think you have great information. So I get your email every day. That's really cool. Coming to the hardening, we see hardening in the markets, especially we see strong hardening in the U.S.
There was a little bit of a question mark at the beginning of the corona crisis virus because the point was, are we going to see the hardening continuing, considering that clearly there will be some pressure in the system? But we didn't see any slowdown. In reality, we even saw an acceleration in the rates. And I would say that's the consequence of the fact that in the industrial business, companies, not only at AGCS, but in general, also our competitors didn't have a great performance over the last years. We shouldn't forget that the COVID is impacting also the industrial business because of the business closure issues. So there is an impact from COVID to some certain degree over time is to be recovered. And then another point is that interest rates in the United States are going down.
And so from that point of view, especially in the long-tail lines, you need also to make up for the lower investment income through price increases. So from that point of view, the hardening didn't stop and is continuing. And from that point of view, our expectation is that we're going to see also a strong price condition in the second half of the year. That was your question?
Yeah. And do you think you'll look to grow with those hardening prices? Do you think it's an opportunity to sort of find a profitable?
Yeah. No, we did. What we do is also to make sure that we are really getting the price that we like. We are looking at the retention. If we see that the retention is too high, then we start thinking maybe we are not taking enough action.
So we are not really looking for growth at this moment. At this moment, it's really about making sure that we have a good portfolio. Once we get to that level, then we are going to start thinking about growth. But right now, it's about really ensuring that we have a profitable book. And growth is a secondary consideration right now.
Okay. That's great. Thank you.
Welcome. The next question, please.
Thank you. We have no further questions from the English Conference.
Okay. That was the last one. Okay. So thank you for all your questions. And again, I'd like to reiterate that it's a clearly different environment. But when you look at the underlying performance of the group, we are doing good. I would submit, even if you just look at the performance as stated, we are still making almost EUR 5 billion operating profit.
So it's a very good result. We have a strong solvency ratio. So from that point of view, I will say that, again, Allianz is delivering nice figures. Thank you for your attention.
[Foreign language]Vielen Dank und wir uns für Ihre Teilnahme. Ihnen.